Gov. Schwarzenegger Is Stealing the Show

When world-famous political neophyte Arnold Schwarzenegger stomped his way into the California governor's mansion last October, there were snickers aplenty in Sacramento over the rocky road ahead.

Seemingly intractable fiscal and political woes loomed. An overwhelmingly Democratic Legislature lay in wait, fuming over the recall of one of its own -- former Gov. Gray Davis -- and ready to pounce on the former action-movie star at his first misstep. Getting elected governor in star-struck California may have been easy; governing California would be anything but.

Today, only six months into his term, Schwarzenegger has astounded the conventional wisdom crowd with an impressive string of early victories. The Republican governor has displayed a deft political touch, boundless energy, a talent for deal-making and, most maddeningly for the Democrats, an ability to repeatedly outflank the Legislature.

"Think about it. In July of last year, he was out promoting Terminator 3.' In August he announces. In November he's sworn in," said San Diego County Supervisor Greg Cox, who is also president of the California State Association of Counties, an advocacy organization for county governments. "He focuses in like a laser on the issues, deals with them, and moves on. It's like he's got a checklist that he's working from."

However, checking items off that list soon may grow tougher. The new governor's revised 2004-05 budget, released earlier this month, fails to fix the state's built-in deficit that within two years could hit an estimated $8 billion, according to the state Legislative Analyst's Office.

And while Schwarzenegger separately has negotiated budget cutback agreements with key constituencies such as educators and local governments, smoothing the state's traditionally tortuous budget process, the compacts also promise billions of dollars to those groups in future years.

This is the sort of spending derided by candidate Schwarzenegger, and it is spending that will require the approval of the same churlish Legislature the governor has been bypassing in his victories.

"He's a political genius and the math doesn't add up," said a chuckling Stephen Levy, director of the Center for the Continuing Study of the California Economy. "He has embraced the spending that he called spending-addict behavior and is now saying it's important to the economy and the future of the state. There's not enough revenue in the existing structure to pay for it, even with robust growth."

Still, Schwarzenegger's early resume reads impressively. He won voter approval in March for a pair of ballot measures to pay off the state's pre-existing debt and mandate balanced budgets in the future. The measures had trailed badly in the campaign's early days, and veteran pollsters credit Schwarzenegger with achieving a turnaround unprecedented in initiative politics.

The governor brokered substantive reform of the state's ballooning workers' compensation system. He won approval of the plan from the Legislature in April, at the same time he was preparing a statewide ballot measure on the issue in case the talks foundered.

In advance of his revised state spending plan, Schwarzenegger stepped outside traditional budget boundaries to forge compacts with local governments in which they accepted $1.3 billion in funding cuts for the next two years. In return, he promised support for a constitutional amendment to go before voters this November providing guaranteed state funding sources in years to come. And he made a deal with the state's education community, promising future funding hikes to education in return for short-term belt tightening.

The governor's revised budget also boosted spending on transportation infrastructure and rescinded earlier proposed cutbacks to safety-net programs, while he continued to stick to his no-new-taxes promise. Schwarzenegger has voiced his trademark optimism that his overall efforts eventually will solve the state's budget problems.

"I want business to grow, so we can create more jobs and have more money for the programs," Schwarzenegger said in a prepared statement accompanying the revised budget. "Higher taxes have no place in our California recovery."

Analysts point out that although the current budget is balanced on paper, thanks to a number of one-time monies, fund shifting and yet-to-be-negotiated givebacks from public employee unions and Indian casino operations, the state still is spending billions more than it takes in.

But those who have been around both Sacramento and the new governor are impressed with Schwarzenegger's ability to sidestep political logjams and reframe debates over policy issues.

"His optimism, his enthusiasm and his can-do attitude are really refreshing. For a long time, counties have been in a stepchild relationship with the state," said Steven Szalay, executive director of association of California counties. "We've worked very closely with the Legislature, trying to get some reform. We haven't been successful, and that's why we had these discussions with the governor, and now with the Legislature."

Stephen Robitaille is a freelancer based in Oakland, Calif., who writes about politics and public policy.

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